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Calculating Relative Price of Imported Goods
A high-quality leather jacket is manufactured and sold in Italy for 250 Euros (EUR). A comparable jacket made and sold in Canada costs 350 Canadian Dollars (CAD). The current currency conversion rate is 1.48 CAD for every 1 EUR. Based on this information, calculate the price of the imported Italian jacket relative to the Canadian-made jacket.
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Calculating Relative Price of Imported Goods
A specific brand of headphones costs ¥15,000 in Japan. A comparable pair of headphones made and sold in Mexico costs 2,000 MXN. If the nominal exchange rate is 0.12 Mexican pesos per Japanese yen, what is the relative price of the imported Japanese headphones in Mexico?
Interpreting Relative Prices in International Trade
A specific brand of smartphone costs ¥150,000 in Japan. A comparable smartphone made and sold in Canada costs $1,300 CAD. If the exchange rate changes from 0.010 CAD per JPY to 0.009 CAD per JPY, the imported Japanese smartphone becomes less expensive relative to the Canadian one.